Plans for Uber to legalise its services in Malaysia have been quashed by the Land Public Transport Commission (SPAD), theSun understands. This report comes days after Chan Park, strategic planning head and general manager of Uber Technologies South East Asia (SEA), said that matters were “under discussion” to legalise its services. However, he failed to elaborate on the progress.

According to SPAD chairman, Tan Sri Syed Hamid Albar, the market “does not need a new player” – more so in locations such as the Klang Valley, Johor Baru and Penang. “They [Uber] are trying to replace the legitimate taxis. Uber is a matchmaker and it utilises all kinds of cars including private vehicles. Uber is offering the kind of services that we cannot legalise,” he said.

Syed Hamid went on to state that while he does not oppose the existence of an app that offers transport services, said app must facilitate “vehicles with a valid permit and the driver has a valid licence.” SPAD enforcement head, Datuk Paduka Che Hasni Che Ahmad, explained Uber’s matchmaking services by stating that the firm hires a local source to deal with car rental and/or leasing companies to cater to the bookings.

The drivers themselves are provided by said local firm. “Uber does not deal directly with car rental companies because it acts as a middleman,” he clarified. Additionally, Syed Hamid also stated that Uber’s cashless payment system is hindering the local economy.

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Taxi drivers protest against GrabCar, Uber and Blacklane.

“The money [fare paid] goes out of the country while the country does not benefit anything from that. There is no spin-off from their business operation, they just operate as they wish,” he stated. Syed Hamid did not comment on the fact that the local drivers here have to be paid by Uber, as well.

As for the steps that Uber can take to ensure its legality in Malaysia, Syed Hamid said that “they [Uber] can buy a taxi company here and operate as a legal transport company.” Currently, SPAD has announced that it will intensify its operations to clamp down on private vehicles used as taxis.

Discouraging consumers to use such services, Syed Hamid said in a report by The Star that “if a customer gets into an accident, passengers are not covered and the insurance company can deny liability.” The use of private vehicles used to ferry passengers is considered illegal. Also, SPAD has found that a majority a Uber drivers do not possess a valid Public Service Vehicle (PSV) driving licence.

Furthermore, private vehicles employed by operators using Uber are not covered under commercial vehicle insurance schemes and are not subjected to Puspakom‘s biannual safety inspections. Drivers and operators who fail to comply risk having their cars confiscated by SPAD in addition to a penalty or imprisonment term.